The coronavirus outbreak is test of our economic, social and political resilience

Extraordinary circumstances are upon us. As COVID-19 spreads across the globe, governments scramble and citizens ponder fearfully, there is little doubting the immensity of the challenge that lies ahead. Few will have contended with anything remotely like this in the past. A global pandemic has thrust its virulent tentacles far and wide. It will test our collective economic, social and political resilience like never before. Battling it will demand a globally coordinated response and reserves of individual patience.

Across continents, the scenes played out are scarcely believable. In a span of a few months, we have gone from social networking to social distancing. With several borders shutting, panic stockpiling of essential items and a public health crisis unfolding, what might have hitherto seemed a script from a movie has taken on a grim reality. Empty supermarkets, distressed travellers and frenzied headlines have combined to convey an urban apocalyptic vision. Europe is in lockdown for the most part: the physical containment also seguing into a huge mental struggle. Not for nothing did the Italian Prime Minister Giuseppe Conte somberly invoke Churchill by declaring, ‘it is our darkest hour’. But in the face of adversity, Churchill had also famously declared that the population will get through. That demands a measure of collective self-belief and resolve.

What early signals can we draw from this debilitating crisis? From an economic perspective, coronavirus threatens to flatten the global economy with perilous consequences for many. The virus has had supply and demand shocks. Supply chains have been impacted by unwell workers and manufacturing shortfalls. As an example, a fall in Chinese supply of intermediate goods has had an important knock-on impact on the electronics and automotive industries. On the demand side as consumer confidence suffers, people are likely to spend less. Add to this the volatility in the equity markets, the threat of a global recession feels uncomfortably real. Against this background, IMF chief economist Gita Gopinath has warned that ‘policy makers will need to implement substantial targeted fiscal, monetary and financial market measures to help affected households and businesses’.

Governments should take urgent note of this call to action. In Britain, the stage has been set by a combination of an interest rate cut and Chancellor Rishi Sunak’s recent budget which announced a package of £30 billion to provide medical and economic support, particularly to small businesses. Extraordinary levels of infrastructure spending have been announced – the largest in half a century. Fiscal conservatism has been set aside momentarily, echoing Coleridge’s ‘willing suspension of disbelief’. In a crisis, the Tories have leaned on Keynes than Hayek. Expect further measures in the coming months, especially as the sectoral vulnerabilities risk a contagion effect. If the last financial crisis precipitated state-aid for banks, this crisis might just force policy makers to assist the aviation and hospitality industry.

Second, it is striking that the public health responses have lacked global coordination. This crisis has demonstrated sadly that the World Health Organization (WHO) – for all its laudable work – has lacked a global model that nations can adopt with some uniformity. Granted that this pandemic poses challenges that are novel, yet few citizens have instinctively looked at the WHO for leadership. In turn, the lack of global cohesiveness and inability of a central agency to read across issues and lessons from one jurisdiction to another has added to confusion. Responses have varied greatly with health screening, testing, travel restrictions and public health precautions varying immensely. In Britain, the government’s outlier approach has prompted vigorous debate. Rather than a formal containment, the approach has looked controversially to a ‘herd immunity’ as means of combating the virus. Contrast that with more stringent measures taken elsewhere in Europe, there is understandable skepticism.

The broader point remains that the world needs a global framework to shepherd multilateral engagement in a public health crisis. Just as the last financial crisis sparked a drive for global regulatory reforms through the G-20 commitments that followed, COVID-19 ought to trigger demands for deeper engagement to mitigate and manage public anxieties in a structured fashion.

Where does this leave us then? At this juncture, it falls to each individual to exercise restraint and civic sense. It also prompts us to consider the plight of the elderly and vulnerable amongst us who need greater support. A period of distancing might also allow individuals to reflect on their lifestyles and what they ought to truly hold dear. Ironically, this dreadful virus might bring families and communities together in the spirit of solidarity. If this crisis causes us to emerge with greater empathy for each other and with deeper appreciation of our vulnerabilities, that would be a silver lining of sorts.

The writer is a London based lawyer and political commentator.

(For all the latest News, Mumbai, Entertainment, Cricket, Business and Featured News updates, visit Free Press Journal. Also, follow us on Twitter and Instagram and do like our Facebook page for continuous updates on the go)

Free Press Journal

www.freepressjournal.in